RHB expects loan growth to grow between 4% and 5% in FY22

RHB Bank Bhd expects loans to grow between 4% and 5% this year compared to 6.7% registered in its financial year 2021 (FY21), with the bulk of the loan growth coming from small and medium enterprises (SMEs) and its commercial segments.
The banking group’s officer-incharge and principal officer Mohd Rashid Mohamad said the reopening of economic activities encourages borrowing by SMEs and retail loans such as mortgage type of loans.
The bank expects its gross impaired loan ratio to be below 1.7% in FY22.
“We will focus on growing our current account savings account (CASA) and we want to maintain our composition of 30% to our total deposits,” he said in a press conference yesterday.
The bank’s net profit for the fourth quarter ended Dec 31, 2021 (4Q21), rose 43.9% year-on-year (YoY) to RM631.17 million due to lower expected credit losses.
Revenue for the quarter slipped 6.1% YoY to RM2.89 billion.
RHB’s net fund-based income grew marginally by 0.2% YoY to RM1.53 billion due to lower funding costs.
Non-fund-based income was down by 25.1% YoY to RM421 million due to lower fee income from brokerage and commercial banking and lower net trading and investment income.
Total income declined 7.2% YoY to RM1.92 billion while operating expenses rose 2.4% YoY to RM910.4 million. In 4Q21, operating profit before allowances for the group was also down by 14.4% YoY to RM1 billion.
For FY21, the group’s net profit came in higher at RM2.62 billion, up by 28.8% YoY due to higher net fund-based income, lower allowances for credit losses and lower net modification loss, partly offset by lower non-fund based income and higher operating expenses.
Net fund based income improved to RM5.87 billion, driven by proactive funding cost management, which dropped 24.1% YoY supported by CASA growth of 4.5%.
Non-fund-based income declined by 7.6% YoY to RM2.16 billion driven by lower net trading and investment income, brokerage income and lower net gain on foreign exchange and derivatives, partly offset by higher commercial banking, capital market and wealth management fee income and higher insurance underwriting surplus.
RHB’s revenue for the period was down by 6% YoY to RM11.75 billion.
Total assets increased 6.8% YoY to RM289.5 billion as at Dec 31, 2021, while net assets per share was RM6.76, with shareholders’ equity at RM28 billion as at end-December.
“The group’s gross loans and financing grew 6.7% YoY to RM198.5 billion, mainly supported by growth in mortgage, auto finance, SME, commercial and Singapore. Domestic loans and financing grew 4.8% YoY, higher than the industry average of 4.5%,” said Mohd Rashid.
GIL stood at RM3 billion in FY21 with GIL ratio of 1.49% compared to RM2.6 billion and 1.32% respectively as of September 2021 and RM3.2 billion and 1.71% respectively as of December 2020.
Loan loss coverage ratio for the group, excluding regulatory reserves, remained well above 100% at 122.4% as at end-December 2021, compared to 147.9% in September 2021.
Customer deposits rose 7.5% YoY to RM218.7 billion, predominantly attributed to fixed and money market time deposits growth of 9% and CASA of 4.5%. CASA composition stood at 30% while liquidity coverage ratio stood at 155.7% as at Dec 31, 2021.